Abstract:
Changing environmental conditions often cause organizations to reallocate resources. In some
cases, this involves budget cuts and reductions in programs and services, which are negative
changes. We explore how the manner in which the outcomes of budget cutting options are framed
and how much power an individual possesses influence the preferred alternative and the
justifications used to explain why a particular option was chosen. We predict that individuals who
are exposed to gain frames or who are in power-holder roles will prefer definite options and
messages with statements of avoiding risks, whereas those exposed to loss frames or who are in less
powerful roles will prefer risky options, including generating new, creative alternative options as
solutions. Also, when individuals are either faced with outcomes framed as losses or the individuals
have little power, they will construct messages that express the desire to avoid rather than to take
risks. Results supported our predictions in 2 experiments. Interestingly, while there were frame and
role effects in the negative change situation of resource depletion (Experiment 1), role effects
disappeared in the positive change situation of resource increase (Experiment 2). The second
experiment was designed to test whether results in Experiment 1 were a function of the negative
change; thus, we used a positive change for the second experiment. In this second experiment,
frame was the only significant predictor, except for predicting the generation of new plans, where
role, frame, and their interaction were all significant predictors.
